88R19539 JG-F
 
  By: Walle, Garcia, Rose, Raney, et al. H.B. No. 1704
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of the workforce housing capital
  investment fund program to fund the development of workforce
  housing in this state; authorizing a fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The legislature finds that:
               (1)  the creation of the workforce housing capital
  investment fund and use of the fund under Subchapter EE, Chapter
  2306, Government Code, as added by this Act, will substantially
  increase the development of workforce housing for households that
  earn between 30 and 80 percent of the area median income;
               (2)  the workforce housing capital investment fund will
  enable loan recipients to access needed capital to plan for future
  growth;
               (3)  the creation of more housing options in this state
  will help stabilize the state economy and local economies across
  this state and reduce the need for other services provided by this
  state and political subdivisions of this state;
               (4)  skilled construction and trade labor shortages
  impact the cost of housing at all income levels; and
               (5)  the use of the workforce housing capital
  investment fund for the purposes of and in the manner described by
  Subchapter EE, Chapter 2306, Government Code, as added by this Act,
  is:
                     (A)  in furtherance of the public purposes of
  mitigating housing deficits and providing housing to a critical
  segment of this state's population that is not often served by
  for-profit housing; and
                     (B)  for the benefit of both this state and
  political subdivisions of this state that are impacted by a lack of
  workforce housing to provide to qualified homebuyers.
         SECTION 2.  Chapter 2306, Government Code, is amended by
  adding Subchapter EE to read as follows:
  SUBCHAPTER EE. WORKFORCE HOUSING CAPITAL INVESTMENT FUND PROGRAM
         Sec. 2306.701.  DEFINITIONS. In this subchapter:
               (1)  "Fund" means the workforce housing capital
  investment fund established under this subchapter.
               (2)  "Program" means the workforce housing capital
  investment fund program established under this subchapter to
  provide zero interest loans to program recipients.
               (3)  "Program administrator" means the nonprofit
  housing organization with which the department contracts to
  administer the program under Section 2306.703.
               (4)  "Program recipient" means a loan recipient under
  the program.
         Sec. 2306.702.  WORKFORCE HOUSING CAPITAL INVESTMENT FUND.
  (a) The workforce housing capital investment fund is a special fund
  in the state treasury outside the general revenue fund.
         (b)  The fund consists of:
               (1)  gifts, grants, and donations received by this
  state for the purposes of the fund;
               (2)  legislative appropriations for the purposes of
  this subchapter;
               (3)  any fees or other sources of revenue that the
  legislature dedicates for deposit to the fund;
               (4)  repayments of loans made from the fund; and
               (5)  interest earned on money deposited to the fund.
         Sec. 2306.703.  PROGRAM ADMINISTRATION. (a) The department
  shall contract with a nonprofit housing organization through a
  one-time competitive procurement process to administer the program
  in accordance with this subchapter.
         (b)  The nonprofit housing organization with which the
  department contracts under this section must be a nonprofit
  organization designated as a Section 501(c)(3) organization by the
  Internal Revenue Service that:
               (1)  has a statewide service area with organizational
  affiliates;
               (2)  provides to organizations designated as Section
  501(c)(3) organizations training and technical support, resource
  development, mortgage services, and disaster preparedness and
  response resources;
               (3)  provides financial literacy education to
  low-income homebuyers;
               (4)  builds single-family residential homes; and
               (5)  works with homebuyers who contribute to the
  construction of their home or the rehabilitation of another
  individual's home, including as a certified nonprofit
  owner-builder housing program provider under Subchapter FF with not
  less than 15 years of experience.
         Sec. 2306.704.  USE OF FUND. (a) The department shall
  provide money from the fund to the program administrator to make and
  disburse zero interest loans to program recipients in accordance
  with this subchapter.
         (b)  Money provided from the fund to program recipients may
  be used only to pay the costs associated with the development and
  construction of workforce, single-family housing projects
  primarily for households that earn between 30 and 80 percent of the
  area median income, including:
               (1)  planning and design costs;
               (2)  land acquisition costs;
               (3)  impact fees and permitting costs;
               (4)  costs associated with flood mitigation, water
  quality, and environmental controls; and
               (5)  costs associated with infrastructure, including
  roads, sidewalks, utilities, and broadband service.
         (c)  Interest earned on money deposited to the fund may be
  used by the program administrator for:
               (1)  program staffing and other related costs
  associated with administering the program; and
               (2)  training programs associated with the purposes of
  this subchapter.
         Sec. 2306.705.  APPLICATION REQUIREMENTS; PROGRAM RECIPIENT
  SELECTION. (a) The department shall prescribe the form and manner
  for an applicant to apply for a loan under the program.
         (b)  An application must satisfy the requirements prescribed
  by the department and demonstrate that the applicant:
               (1)  is incorporated under this state's laws as a
  nonprofit organization;
               (2)  is organized for the purpose of building
  owner-occupied residential homes for households that earn between
  30 and 80 percent of the area median income and has carried out that
  purpose for not less than 15 years; and
               (3)  has experience in providing training and technical
  support, resource development, mortgage services, and disaster
  preparedness and response resources that expand the applicant's
  capacity to serve communities in this state.
         (c)  The program administrator shall review applications and
  select applicants to provide loans to under the program. In
  selecting applicants, the program administrator:
               (1)  shall consider the quality of the application and
  the applicant's ability to carry out the purposes of this
  subchapter; and
               (2)  may give priority to applicants that partner with
  organizations that provide training opportunities to construction
  trade workforce members.
         (d)  The program administrator may require an applicant to
  pay an origination fee on a loan application.
         Sec. 2306.706.  ANNUAL REPORT; INTERNET POSTING. (a) The
  program administrator shall prepare and submit to the department an
  annual report on the program. The report must include:
               (1)  information on the program recipients that
  received a loan under the program during the preceding year;
               (2)  a description of each workforce housing project
  funded by a loan under the program, including:
                     (A)  the project's expected completion date and
  information on the progress made during the preceding year toward
  completing the project;
                     (B)  the number of families the project is
  expected to serve; and
                     (C)  the total amount and repayment status of the
  loan; and
               (3)  other information the department requires.
         (b)  The department shall post on the department's Internet
  website the information submitted to the department under this
  section.
         Sec. 2306.707.  INDEPENDENT FINANCIAL AUDIT. (a) The
  program administrator shall annually commission from a certified
  public accounting firm an independent financial audit of the
  program administrator's financial activities in relation to the
  program and the use of money in the fund. The program administrator
  shall provide the results of the audit to the department for the
  department's review and evaluation.
         (b)  In the event the department determines from the results
  of the audit that money from the fund has not been used in
  accordance with the purposes of this subchapter, the department may
  require repayment of the money over a period and in the manner the
  department requires.
         Sec. 2306.708.  RULES. The department shall adopt rules to
  implement the program and carry out this subchapter, including
  rules on:
               (1)  application procedures and requirements for an
  applicant to receive a loan under the program;
               (2)  the investment of money in the fund; and
               (3)  the administration of the fund.
         SECTION 3.  As soon as practicable after the effective date
  of this Act, the Texas Department of Housing and Community Affairs
  shall adopt rules to implement Subchapter EE, Chapter 2306,
  Government Code, as added by this Act.
         SECTION 4.  This Act takes effect September 1, 2023.